Sourcing external digital solutions: Digital technologies' architecture and knowledge exchange

Sourcing of external digital solution has become an important strategy incumbent firms are using to accelerate their digital transformation. However, external knowledge and technology sourcing is a complex, multi-phase process that requires exchanging various kinds of knowledge across cognitive, technological and organizational boundaries. Using a longitudinal in-depth qualitative analysis of 15 early-stage pilot projects between startups offering digital solutions and electric utilities seeking to adopt them as empirical setting, we develop a framework of external digital technology sourcing. This framework explicates how and why knowledge exchange patterns differ given a derived set of digital technology integration processes - positioned along the digital technology stack. We show that service enablement at the data-application interface triggers a parallel knowledge iteration pattern, system harmonization at the data-network interface triggers a concurrent knowledge co-creation pattern and assuring hardware efficacy at the network-device interface triggers a sequential knowledge validation pattern. We discuss contributions to the literature on digital innovation and external knowledge sourcing.